Issues in the Auto Insurance Market

The majority of major auto insurance carriers have been losing money for the last few years.

Here’s why:

1. Newer cars come with sophisticated electronics, which drive-up repair costs.
2. These expensive parts have been difficult to source post-COVID due to supply chain issues.
3. Labor shortages compound the problem.
4. A simple diagnostic test can set you back by $500-1000.
5. During Covid, people drove less.  This didn’t last long.  Many insurance companies, caught off-guard, failed to adjust their rates in time. 

The result? 

Insurance Giants have been losing money on auto insurance.

The overarching reason:

Vehicle technical advancements have outpaced traditional pricing models and made cars more expensive to fix.

At VERVE, we’ve recognized this misalignment and have chosen a new path. 

We’re avoiding these turbulent waters by leaning on technology to target a market that suits our strengths and foresight.